Eurogroup Chief ‘Tainted’ by Dutch Rescue Plans, Frieden Says

March 20 (Bloomberg) -- Dutch Finance Minister Jeroen
Dijsselbloem, who took over as head of the group of euro-area
finance chiefs this year, is “tainted” by debates over bank
rescues in his home country, Luxembourg’s Luc Frieden said.

After succeeding Luxembourg Prime Minister Jean-Claude
Juncker in the Eurogroup post in January, Dijsselbloem led an
all-night meeting of the ministers on March 15-16 that agreed
unanimously to tax Cypriot bank deposits as part of a bailout
package for the country. That deal was rejected yesterday by the
nation’s parliament in Nicosia.

“Mr. Juncker would probably have listened more to some
countries than the current chairman, who is doing his job very
well, but at the same time is also tainted by the heavy debate
on the rescue plans in his own country, the Netherlands,”
Frieden, his nation’s finance chief, told Luxembourg radio RTL
in an interview today.

In the Netherlands, Dijsselbloem nationalized SNS Reaal NV
on Feb. 1 after losses on real-estate loans brought the lender
to the brink of a collapse. The nationalization, which became
irrevocable after a ruling from the highest Dutch administrative
court on Feb. 25, included issued shares, subordinated bonds and
loans. The Dutch government said senior bondholders were
excluded from losses because the EU does not yet have a bank-resolution framework.

The SNS nationalization came less than five years after the
Netherlands bought Fortis’s Dutch banking and insurance units
and its stake in ABN Amro Holding NV for 16.8 billion euros
($21.8 billion) when the company ran out of short-term funding,
customers withdrew deposits and investors lost confidence. The
government also provided aid to ING Groep NV, the biggest Dutch
financial-services company, and Aegon NV at the time.